Private equity firm Carlyle is reportedly preparing to sell a 2.5% stake in Indian logistics company Delhivery through a block deal, according to recent media reports. The planned sale involves offloading 1.84 crore shares, representing a 2.53% stake in Delhivery, with an estimated value of $86 billion. The floor price for the transaction is set at ₹385.5 per share, which indicates a slight discount compared to the current market price.
Citigroup has been chosen as the sole broker for the deal, as per the reports. The transaction is expected to provide Carlyle with an opportunity to monetize a portion of its investment in Delhivery, a move that aligns with the private equity firm’s investment strategy.
Delhivery, a prominent player in India’s logistics industry, recently announced its financial results for the quarter ending in March. The company reported a net loss of ₹159 crore during this period, compared to ₹119.8 crore in the corresponding period last year. Delhivery’s revenue from operations in Q1 2023 stood at ₹1,859.6 crore, reflecting a decline of 10.2% compared to ₹2,071.7 crore in the same period in 2022.
The logistics firm cited several factors contributing to its revenue decline, including the impact of falling global yields in air and ocean freight, reduced volumes due to the Chinese New Year holidays, and challenges in the cross-border services business.
Despite the challenging market conditions, Delhivery’s adjusted EBITDA margin improved to 0.3% in Q4FY23, marking a 397 basis points increase compared to 3.7% in Q3 FY23. The company also noted that the incremental gross margin in its core express parcel and PTL (Part Truckload) businesses continued to remain above 50%.
Delhivery’s performance in the market has been positive this year, with its stock gaining 17% on a year-to-date basis. However, Carlyle’s decision to divest a portion of its stake in the company indicates a strategic move to unlock value from its investment. The block deal presents an opportunity for interested investors to acquire a stake in Delhivery, a leading player in India’s rapidly growing logistics sector.
The completion of the block deal will provide further insight into investor sentiment and the market’s outlook on Delhivery’s future growth prospects. As the logistics industry continues to evolve and adapt to changing dynamics, Delhivery aims to strengthen its position by leveraging innovative technologies and expanding its service offerings.
The block deal is expected to attract significant attention from market participants, particularly those interested in investing in India’s logistics sector. It will be interesting to see the final outcome of the transaction and its impact on Delhivery’s future trajectory as it navigates the evolving landscape of the logistics industry.
